This is really an apology to all of my current clients. The rest of you can hopefully benefit.

It just dawned on me. I’ve been railing against all the media gurus for generating financial pornography disguised as information and packaged as entertainment for most of my twenty years advising clients.

I’ve told everyone who would listen just how meaningless all that `white noise’ was; how no one knows what the market will do, much less any given investment. No one ever has. No one ever will.

I am still telling them – including you right now – that the only reason the media puts out all that financial junk food is simply because the only content they can sell on a daily basis is something that’s constantly changing. It’s like MTV in suits. Their stock-in-trade must appear to be timely and packaged as information in an entertaining format.

They have to. It’s all they can do! They need you to tune-in every single day! They must have a new story every day! That’s why all the charts, all the statistics, all the daily analysis. If they cram enough data into your head, it begins to sound like wisdom!

Information is easy. Education is hard. It’s not as much fun. If they were to truly educate the public, they’d be stuck with a single show in reruns for years. It would sound something like this:

“No one can predict the stock market and no one knows what’s going to happen tomorrow. All we do know from history is if you don’t quit, you will succeed.” End of story. Show’s over. Stay tuned for Chopper Dave.”

Their information may sound timely; but truth is timeless.

Investment success is not now, nor has it ever been, about economic or market prognostication. It’s not about investment selection. It’s not about market `timing’. It’s about planning. It’s about persistence. It’s about focus and commitment.

It’s not about being smart. It’s about not being dumb.

That’s the truth.

It’s that simple.

Why is what’s so obvious so hard to believe?

“I’ve never met anyone who could predict the stock market.”

– Warren Buffet

But wait! Who am I to be on that soap box? I’ve been part of the problem!

On a somewhat regular basis for twenty years, I’ve been foisting my own all-knowing pontifications on my more than politely accepting clients – grandly bestowing upon them all my cumulative wisdom which, when all the dust settles, is little more than more than my own `white noise’ (Don’t listen to their white noise! Listen to mine!).

It’s time I enter a program. My apologies to all – clients and anyone else unlucky enough to have been subjected – for both the infliction and the infections that may have resulted.

No more. I’m in remission.

No more preaching long-term thinking out of one side of my mouth while yakking about meaningless short-term events which simply won’t matter in two weeks out of the other side.

Does that mean I will no longer discuss the economy or it’s implictions? Not likely. I’m bound to have a relapse. But, I’m going to go out of my way to tell whoever’s listening just how meaningless it all is.

After all, what could today’s news event possibly have to do with your future thirty years from now? After all, when you go out to buy a new car, food at the grocery store, or simply need to pay your utility bill, those prices will certainly be higher, just as they’re higher today than they were in the ’60s, ’70s and ’80s. The people who didn’t plan back then because of the nuclear arms race, hyper-inflation, the shortage of Mid-East oil, and all those other `crisis’ points simply let the news keep them from doing what they needed to do – and didn’t – because they didn’t believe someone who told them they should.

Financial planning and advice isn’t about fortune telling or reading tea leaves. What it IS about is helping people succeed through life – avoiding bad investment behaviors. It’s about helping people achieve a rising stream of income for two lives through three decades of retirement allowing them to maintain their independence.

And, that has little – even nothing – to do with the news.

World War II took fifty-five million lives (an average of 26,000 war deaths per day); the Cuban Missile Crisis threatened world peace; but we’re still here and the Berlin Wall is gone. Terrorists today threaten Mid-East Oil supplies, but the world has twice the oil reserves it had in 1970. The credit crunch has destroyed home values; but my first house, a 3-bedroom, 2-bath, purchased in 1978 for $62,000 in Simi Valley is valued at $325,000 today!

The moral: Events are temporary. The future is permanent.

As an advisor, my focus should never have been on `what’s happening’, but on what’s ahead: Decades of inflation and tax law changes – and a realization that we do NOT know what’s going to happen in either the economy or the markets.

Those things are constantly changing and will always be changing. But, there is one thing we do know. There has never been such a thing as a `new low’ and there have always been `new highs’. The long-term trend always has, and always will be, up. Now, I can’t prove that. Nor can I prove the sun will rise tomorrow or that snow will appear on the Rockies next winter; but it’s something I accept without hesitation or reservation. So should you.

It’s how we navigate that counts; not our prognostications, investment selections, or how we try to `time’ our buys and sells. None of that – NONE of it – matters. What matters is how we plan for the easily forseeable risks we intuitively know do exist.

We know that everything we buy will cost more next year. We know the average retirement age is 62 and the life expectancy of a non-smoking couple is around 92; so we can assume that increasing prices will be a factor in retirement for two lives over an average of thirty years.

That’s risk. It’s real. It’s forseeable, even predictable! What bearing does today’s news have on your plans for three decades of inflation? Zero, zilch, nada, nothing. Events are temporary. The future is permanent (sorry, but it’s worth saying twice).

So, while I’ll continue to forward my clients various Insights and Commentaries from the various money management, reporting, and custodial institutions, I’ll keep my own to a minimum. After all, `.. is not my yob, man.’ My job is to help people make sure they’ll have a rising stream of income in retirement they’ll never outlive and to help them make sure their plan stays on-track.

That’s what they’ll notice thirty years from now, after they’ve forgotten the commentaries from thirty years ago.

Jim

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Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER™ and in his 20th year of private practice as Founding Principal of The Independent Financial Group, a fee-only registered investment advisor with clients located in New York, Florida, and California. IFG does not sell products, earn commissions, or accept any third-party compensation or incentives of any description. Nothing contained herein should be regarded as tax or legal advice and the reader is urged to seek competent counsel to address those issues. The above represents the author’s opinion and should not be regarded as investment advice which is provided only to IFG clients upon completion of a formal financial and investment plan. For questions or comments, you can reach Jim at 805.265.5416 or through the IFG website, http://www.indfin.com.